Changes to financial aid and housing assistance for students, 1 August 2017

The study grants paid to higher education students will be adjusted to the level of the grants provided to students in secondary education (max. EUR 250.28 per month). Student loan amounts will be raised for all students. The qualifying conditions for study grants and government guarantees for student loans will undergo numerous changes as well.

Students living in rented accommodation in Finland will be covered by the general housing allowance scheme.

Changes to housing assistance for students
Changes to financial aid for students in higher education
Changes to student loans
Changes to income check rules and other changes
Summary of the changes to the financial aid system
Steps that students should take
Exemption from the payment of student loan debt owed under the government loan guarantee
 

Students will be covered under the general housing allowance scheme

The housing supplement scheme for students will be discontinued. Students renting an apartment in Finland can claim general housing allowance starting 1 August 2017. The housing supplement scheme will remain in place for students going to school abroad or enrolled in a Finnish folk high school, sports institute or a tuition-based programme at the Sámi Education Institute.

Kela will discontinue student housing supplement payments automatically for those being transitioned into the general housing allowance scheme.

You can estimate the amount of housing allowance you can get with this calculator. Beginning in August 2017, study grant payments count as income for purposes of the housing allowance. When using the calculator, input your study grant (usually EUR 250 per month) for example under Adult education subsidy.

The calculator and the instructions for using it are being updated. An updated version will be launched on 12 February 2017.

How to apply for the general housing allowance

If you are eligible for general housing allowance and know beforehand how much income you will have, how much you will pay for your housing, and what your housing circumstances will be like starting in August, you can now use Kela's online customer service to file a claim for housing allowance (in Finnish or in Swedish).

Persons sharing a household must claim general housing allowance together. If one member of the household already receives general housing allowance payments, he or she must apply for a review of the allowance.

You can get general housing allowance retroactively for one month from the month of application. In order to qualify for housing allowance starting in August, you must claim housing allowance from Kela by the end of September. You must have had a valid rental agreement since 1 August or earlier.

Persons who are considered to part of the same household:

  • close relatives sharing a home (married and cohabiting couples, grandparents, parents and children)
  • spouse or partner living elsewhere and under-age children
  • persons renting a home under a joint rental agreement
  • persons renting a home under separate rental agreements if collectively they pay rent for the entire home.

Persons who are not considered to be part of the same household:

  • persons renting part of a home under separate rental agreements, if they are not close relatives and they are not collectively responsible for paying rent for the entire home
  • a tenant and a subtenant unless they are close relatives.

Amount of the general housing allowance

The amount of housing benefits is affected by the gross income of the persons making up a household.

When the housing allowance is calculated, each person's income is taken into account either as an amount averaged over a certain period or as income received continuously.

  • If a person's income stays the same for at least three years starting from the time the housing allowance is granted or reviewed, the allowance is calculated according to that income.
  • If the income varies, the housing allowance is calculated on the basis of income averaged over the next 12 months.

An earnings deduction is made from every household member's salary, income from self-employment and income from agriculture. The deduction is EUR 300 per month.

Income limits for the housing allowance are shown in the following tables: lower income limits (the maximum amounts of income that a person can have without reduction of the housing allowance) and upper income limits (the amount of income at which housing allowance is no longer payable). Please take into account the earnings deduction and the fact that study grant payments (unlike the student loan) count as income for purposes of the housing allowance. The earnings deduction does not apply to the study grant or other social benefits because they are not considered to be earned income.

The maximum limits for housing costs vary by household size and location of the home. If you live alone and rent your home, up to EUR 344-508 can be accepted as your housing costs, depending on the municipality in which you live. In cases where the recipient's income does not affect the housing allowance, the allowance covers 80% of acceptable housing costs up to the maximum limit for housing costs.

General housing allowance: Checklist for students

Please note the following:

  • Housing allowance is available to persons living in Finland. Foreigners may be eligible for housing allowance if they are covered by the Finnish social security system.
  • You must present a rental agreement to show that you are renting your home. Housing allowance is not available for those residing in a hotel, an institution or a place of temporary residence (such as emergency housing for students).
  • Housing allowance is paid out on the first business day of the month. It is paid into the bank account stated by the recipient in the application, or directly to the landlord.
  • Student status is not required to qualify for the housing allowance. While months of study and maximum time limits for receiving financial aid for students are not relevant for the housing allowance, study grant payments do count as income. The student loan does not count as income.
  • The housing allowance does not affect eligibility for student financial aid, and does not count as income for financial aid purposes.
  • Housing allowance is not available if you have access to free housing based on your student status. However, housing allowance may be granted if you cannot accept the free housing for a good reason. The accepted reasons are largely the same as those which apply to the housing supplement for students (see Student housing supplement and free dormitory accommodation).
  • If you are under 18 years of age and live independently (i.e., not with your parents), you can be paid general housing allowance if you have earned income or if you receive financial aid for students or some other social benefit. First apply for financial aid for students. If you are awarded a study grant or a government guarantee for a student loan, you can claim housing allowance. Kela will not check whether you actually take out a student loan.
  • If you, your spouse or partner, or other family members live in separate homes because of studies, you can get housing allowance for only one of those homes. You must choose which home you wish to claim general housing allowance for.
  • If you are renting from your parents or if the rental home you live in is owned by your parent, you can get housing allowance under the same terms as any other applicant.
  • If you are paid housing allowance you must tell Kela immediately of significant changes in your income, changes in the number of persons living in your household, and other changes relevant to the housing allowance.

Student housing supplement after 1 August 2017

The student housing supplement will continue to be paid after 1 August 2017 to the following groups:

  • students studying abroad who live in rental housing (usually EUR 210.00 per month)
  • students enrolled in a tuition-based programme at a Finnish folk high school, sports institute or the Sámi Education Institute who live in a school dormitory (usually EUR 88.87 per month).

The housing supplement for foreign study can be granted to:

  • students studying in a foreign educational institution
  • students studying in a Finnish educational institution who are completing a study unit abroad.

To qualify, students must both live and study abroad.

If you do not live abroad for study reasons, you cannot be paid the housing supplement.

If you live independently and get general housing allowance for your home in Finland, you can be paid the housing supplement when you begin a period of study abroad. In that case, payment of the general housing allowance for your home in Finland is stopped after a maximum of 3 months.

The housing supplement for foreign study is not available if you live your parent or in an owner-occupied home. The term 'owner-occupied' refers to any home owned by yourself, by your spouse or partner or by your parent.

Changes to financial aid for higher education students

The study grants paid to higher education students will be adjusted with effect from 1 August 2017 to the level of the grants provided to students in secondary education (max. EUR 250.28 per month).

  EUR per month before taxes Effect of parental income.
Secondary education
Effect of parental income.
Higher education
Basic amounts of the study grant starting 1 August 2017
married or has dependants 250.28    
Lives alone, aged 20 or over 250.28    
Lives alone, aged 18-19 250.28 C  
Lives alone, aged 17 101.74 B A
Lives with his/her parent, aged 20 or over   81.39 A A
Lives with his/her parent, aged 17-19   38.66 B A

Subject to a parental income test, the study grant can be
A = increased; B = increased or decreased; C = decreased, parental income will have no effect after 1 January 2018

The introduction of uniform rates for the study grant will decrease the study grants paid to students attending Snellman college or an institute of vocational education abroad, who have, up to now, received the study grant at the same rate as higher education students.

Maximum aid period for new students shortened

The maximum period of financial aid that new higher education students can get for one degree is reduced by two months. New students are those who begin their first course of higher education study in or after autumn term 2017.

 
Extent of the degree programme in credits Target time to degree in academic years Maximum period of eligibility in months
Maximum periods of financial aid for persons beginning their first course of higher education study on or after 1 August 2017
120 2 21
150 2.5 26
180 3 30
210 3.5 35
240 4 39
270 4.5 44

 

Extent of the degree programme in credits (bachelor's + master's = total) Maximum period of eligibility for bachelor's degree in months Maximum period of eligibility for master's degree in months Total maximum period of eligibility in months
Maximum periods of financial aid for persons beginning their first course of higher education in a university on or after 1 August 2017.
180 + 120 = 300 30 21 48
180 + 150 = 330 30 26 53
210 + 120 = 330 35 21 53
180 + 180 = 360 30 30 57
330     53
360     57


Shorter financial aid duration for second degree

The maximum period of time for which financial aid is available for higher education is shortened to 54 months for students who already have earned one degree and who begin a new course of higher education study in or after autumn term 2017. However, if you are completing a 360-credit licentiate's degree in medicine or veterinary medicine and begin your course of study on or after 1 August 2017, you can get financial aid for a total of 57 months.

The maximum total period of financial aid for higher education study will continue to be

  • 64 months if you began a new course of higher education and registered as an attending student between 1 August 2014 and 31 July 2017
  • 70 months if you began a new course of higher education and registered as an attending student before 1 August 2014.

Student loan amounts raised, loan access conditions eased

The amounts of government guaranteed student loans will be raised. The most typical loan amount of EUR 400 per month will go up to EUR 650. Starting 1 August 2017, students in secondary education who are under 18 years of age are eligible for a student loan of EUR 300 per month, while students studying abroad can get EUR 800 per month. If you have been given a student loan guarantee for your entire course of study, you will in July 2017 automatically receive a decision on your student loan for academic year 2017-2018

Although the amount of loan funding available will increase, the maximum amounts of the student loan tax deduction and student loan compensation for higher education students will remain unchanged. The student loan compensation is 40% and the student loan tax deduction 30% of student loan debt exceeding EUR 2,500. See also the maximum amounts of the compensation and the tax deduction.

Starting with autumn term 2017, a payment default entry will no longer prevent students from qualifying for a government loan guarantee. If you applied for a loan guarantee and did not get it because of a payment default issue, use the notification of changes form to apply for the loan guarantee (or file a new application for student financial aid if you do not yet receive financial aid). For periods of study beginning on or after 1 August 2017, the earliest that you can apply for a student loan guarantee is March 2017. If you are in higher education and receive study grant payments, you need not apply for a loan guarantee because it will be awarded to you automatically.

However, the loan guarantee will not be awarded if you have student loan debt which is being collected by Kela.

Access to student loans is also eased by allowing students in secondary education to take out all of their loan funds for one term at once, just as is currently case with students in higher education.

  Earliest disbursement date
Student loan disbursement dates starting 1 August 2017
Student loan for the autumn term (1 August - 31 December) 1 August
Student loan for the spring term (1 January - 31 July) 1 January

 

Means test rules for student financial aid eased

The percentage of increase applied to student financial aid recovered after a review of the financial aid recipient's own income is reduced from 15% to 7.5%. The 15% rate will still apply to the income review for the year 2015, which will be carried out in February 2017. The new rate of 7.5% will be in effect starting with 2016.

Be sure to take into account the changes in study grant and housing supplement payments. If your annual income exceeds the maximum limit applied in the student financial aid scheme, cancel or return months of aid in the rest of 2017 (i.e., months for which you are not paid a housing supplement and are paid study grant at a reduced rate for higher education students). Do not cancel or return months of aid for the first half of 2017.

The limits on allowable annual income will be increased in 2018. The increase is linked to changes in wages and salaries. The updated income limits will be published in late 2017.

Students aged 18 or 19: parental income rules eased starting 1 January 2018

The rules on the effect of parental income on a student's eligibility for financial aid will be eased at the beginning of 2018 as well. After that, parental income will no longer affect the ability of students at the secondary level who are 18-19 years of age and live independently to qualify for study grants.

Apply for a study grant if you are a student in secondary education, aged 18 or 19, and live independently on or after 1 January 2018, and you previously did not qualify for the study grant because of your parents' income. The earliest that you can make the application is July 2017. If you currently receive or used to receive some other form of financial assistance for the same course of study, you can apply for the study grant by filing an online notification of change. If you get study grant payments but at a reduced amount due to parental income, we will automatically award you a larger study grant with effect from January 2018.

Financial assistance for students increased overall

Because of the increased amount of student loan funding available and the changes affecting housing aid, most students will be eligible for a larger amount of financial assistance. The monthly amount of aid available to students attending school in Finland may increase by as much as EUR 450.

For low-income students living alone in rental accommodation, the monthly aid package consists of a study grant payment of about EUR 250, a EUR 650 student loan, and a EUR 275-405 housing allowance, depending on the municipality in which they live. Starting 1 August 2017, the total amount of financial assistance and housing allowance will be between EUR 1,175 and EUR 1,305 per month. Before the changes outlined above go into effect, the total amount of financial assistance for students attending school in Finland is between EUR 850 and EUR 940.

The amount of aid available will decrease for those higher education students who do not qualify for the general housing allowance because of the income of their spouse or partner or of another household member. The amount of aid will go down by EUR 5 to EUR 40, because the increased amount of student loan funds available does not fully compensate for the reduction in the study grant and the discontinuation of the housing supplement payments. If a student attending school in Finland is not paid a housing allowance, he or she can get EUR 900 in financial assistance, EUR 650 of which is the student loan.

When is a new application needed?

Kela usually revises the amounts of existing financial aid payments automatically. Most financial aid recipients receive a decision indicating the revised amount of aid at the end of May or the beginning of June. The decisions on government loan guarantees for academic year 2017-2018 are mailed in July. You may receive the decision earlier if you apply for financial aid for the summer months or if your financial aid is reviewed in the spring for some other reason.

Be sure to file a notification of change online or on form OT 15 if

  • you have not received a government loan guarantee because of a payment default issue (higher education students who receive study grant payments need not file an application). The earliest that you can apply for a loan guarantee for a period of study after 1 August 2017 is March.
  • you are in secondary education, aged 18 or 19, and live independently, and you do not get study grant payments because of your parents' income. July is the earliest you can apply for a study grant for a period of study beginning on or after 1 January 2018.

If you currently do not receive any form of student financial aid, file an application for financial aid online or use the form OT 1 (OT 3 if you study abroad).

If you qualify for general housing allowance and know beforehand how much income you will have and what your housing costs and other circumstances will be like starting in August, you can use Kela's online customer service to file a claim for housing allowance as early as May 2017. Alternatively you can file the claim on form AT 1. Persons sharing a household must claim general housing allowance together. If one member of the household already receives general housing allowance payments, he or she must apply for a review of the allowance.

You can get general housing allowance retroactively for one month from the month of application. In order to get housing allowance payments already for August, your application should reach Kela by the end of September. You must have had a valid rental agreement since 1 August or earlier.

Kela will discontinue student housing supplement payments automatically for those being transitioned into the general housing allowance scheme. You will receive a decision about this by the beginning of June.

Exemption from the payment of student loan debt owed under the government loan guarantee


The qualifying conditions for exemption from the payment of student loan debt owed under the loan guarantee scheme will change with effect from 1 August 2017. To qualify for an exemption, persons with guaranteed student loan debt will have to satisfy an income test as specified by law. Read more: Interest and repayment and Recovery of overpayments.

Last modified 08/06/2017
Updated 03/03/2017